European gas prices jumped Thursday after a surge in attacks on commercial shipping in the Strait of Hormuz and the Red Sea revived geopolitical risk premia. The move came even as EU storage facilities kept filling ahead of winter, now sitting above last month's level but still below the prior year's benchmark.
European wholesale natural gas futures climbed on Thursday as intensifying military attacks on commercial shipping across Middle Eastern maritime choke points reignited geopolitical risk premia across energy bourses. The Dutch front-month contract, Europe's benchmark, jumped 2.8% to 80.20 euros per megawatt-hour. In Great Britain, the equivalent wholesale gas contract surged 3.0% to 199.40 pence per therm.
The rally erased the market's early-week lull, forcing energy trading desks to price in persistent risk premia. Maritime security agencies report a sharp escalation in drone and missile strikes targeting commercial tankers and energy vessels transiting the Strait of Hormuz and Red Sea shipping lanes.
Surging war-risk insurance premiums and potential rerouting of seaborne LNG cargoes continue to threaten the stability of Western European regasification schedules. Energy analysts note that while crude oil shipments have found partial workarounds, seaborne LNG logistics remain far slower to recover, leaving regional gas curves acutely vulnerable to sudden transit halts.
Providing a structural counterweight to the geopolitical anxiety, European Union underground natural gas storage facilities continue their steady pre-winter accumulation. Latest data from Gas Infrastructure Europe shows EU gas storage caverns sit at 72.83% capacity, up from 66% a month ago.
However, meteorological models for Northwestern Europe point to downward temperature revisions and an early start to space-heating demand. Trading desks emphasize that current reserve levels remain below last year's historical benchmarks, leaving the market with minimal margin for error if early winter cold snaps materialize.
Source: Investing.com (Commodities & Futures News)
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